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What drives property investment?

On Dec 01 2015
Tagged as:
  • Residential Property


LJ Hooker recently undertook a survey of landlords to find out why they regard residential property ...

LJ Hooker recently undertook a survey of landlords to find out why they regard residential property as a stable investment option. Below is a summary of the key findings.

Boosting wealth and setting up retirement

An investor’s property portfolio transforms in-line with their journey through life. Investors aged between 25 and 34 own two properties on average while those close to retirement (55 to 64) own more than three properties. Then, at the age of 65, investors sell down a proportion of their portfolio to help fund their retirement, with the 65+ age group owning an average of just under two properties.

 

Income doesn’t limit investment

Property investment is not just limited to the wealthy. The survey showed that 37% of landlords have an annual household income of under $100,000 per year. A further 29% earn between $100,000 and $150,000 and 34% have an income of more than $150,000 per year.

 

A balanced investment strategy dominates

One of the key drivers pushing investors during the current cycle has been strong capital growth, seen particularly in Sydney and Melbourne. Our survey results show while a majority of investors take a “balanced” investment strategy (58%), a large proportion do view “capital growth” as a vital part of their investment strategy (27%), compared to those just focusing on “yield” (15%).

 

Investors search far and wide for the right property

The mobility of investors is also highlighted in our survey with just 16% owning an investment property within 5 kilometres of where they live. The majority of investors (28%) have an investment property “more than 20 kilometres but in the same state” of where they live while 14% invest in a different state to the one where they live.

Conclusion

The broad demographic of property investors shows property investment transcends age and plays a vital role in creating wealth through all stages of life.

 

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